EX-10.1






	 	 	 
	NATIONAL CITY BANK

629 Euclid Avenue

Cleveland, Ohio 44114

	 	CREDIT SUISSE

CREDIT SUISSE SECURITIES (USA) LLC

Eleven Madison Avenue

New York, New York 10010






CONFIDENTIAL




March 24, 2006




Ferro Corporation



1000 Lakeside Avenue,



Cleveland, Ohio 44114



Attention: Tom Gannon



Chief Financial Officer



Ferro Corporation




Senior Credit Facilities




Commitment Letter




Ladies and Gentlemen:



You have advised National City Bank (together with its affiliates, “National City Bank”),
Credit Suisse Securities (USA) LLC (“CS Securities”) and Credit Suisse (“CS” and, together with CS
Securities and their respective affiliates, “Credit Suisse” and together with National City Bank,
“we”, “us” or the “Financing Parties”) that Ferro Corporation, an Ohio corporation (the “Company”)
intends to (a) refinance existing indebtedness (including all funded indebtedness, but not
necessarily the Company’s outstanding notes and debentures) of itself and its subsidiaries (the
“Refinancing”), (b) pay fees and expenses incurred in connection with the Refinancing (together
with the Refinancing, the “Transactions”) and (c) take such other actions as further described in
the Term Sheet (defined below).



You have further advised us that, in connection therewith, (a) the Borrowers (as defined in
the Summary of Principal Terms and Conditions attached hereto as Exhibit A (the “Term
Sheet”, capitalized terms used but not defined herein have the meanings assigned to such terms in
the Term Sheet) are interested in obtaining the senior credit facilities (the “Facilities”)
described in the Term Sheet, in an aggregate principal amount of up to $[700],000,000.



1. Commitments.



In connection with the foregoing, National City Bank is pleased to commit to provide,
severally and not jointly, 50% of the Facilities, and CS is pleased to commit to provide, severally
and not jointly, 50% of the Facilities, in each case upon the terms and subject to the conditions
set forth or referred to in this commitment letter (including the Term Sheet and other attachments
hereto, this “Commitment Letter”). The commitments of CS and National City Bank hereunder will be
allocated ratably among the Facilities.



1



2. Titles and Roles.



You hereby appoint (a) National City Bank to act, and National City Bank hereby agrees to act,
as sole administrative agent for the Revolving Facility, (b) CS to act, and CS hereby agrees to
act, as sole administrative agent for the Term Facility, and (c) CS Securities and National City
Bank to act, and CS Securities and National City Bank each hereby agrees to act, as joint lead
arrangers and joint book runners for the Facilities, in each case on the terms and subject to the
conditions set forth or referred to in this Commitment Letter. Each of CS, CS Securities and
National City Bank, in its respective capacities, will perform the duties and exercise the
authority customarily performed and exercised by it in such roles. You agree that no other titles
will be awarded and no compensation (other than that expressly contemplated by this Commitment
Letter and the Fee Letter referred to below) will be paid in connection with the Facilities unless
you and we shall so agree.



3. Syndication.



We reserve the right, prior to and/or after the execution of definitive documentation for the
Facilities, to syndicate all or a portion of our commitments with respect to the Facilities to a
group of banks, financial institutions and other institutional lenders (together with National City
Bank and CS, the “Lenders”) identified by us in consultation with you. We intend to commence
syndication efforts promptly upon the execution of this Commitment Letter, and you agree actively
to assist us in completing a satisfactory syndication. Such assistance shall include (a) your
using commercially reasonable efforts to ensure that any syndication efforts benefit materially
from your existing lending and investment banking relationships, (b) direct contact between your
senior management, representatives and advisors and the proposed Lenders, (c) your assistance in
the preparation of a Confidential Information Memorandum for the Facilities and other marketing
materials to be used in connection with the syndications, (d) your providing or causing to be
provided a detailed business plan and projections of the Company and its subsidiaries for the years
2006 through 2010 and for the quarters beginning with the first quarter of 2006 and through the
second quarter of 2007, in form and substance satisfactory to the Financing Parties and (e) the
hosting, with the Financing Parties, of one or more meetings of prospective Lenders. You agree, at
the request of the Financing Parties, to assist in the preparation of a version of the Confidential
Information Memorandum and other marketing materials and presentations to be used in connection
with the syndication of the Facilities, consisting exclusively of information and documentation
that is either (i) publicly available or (ii) not material with respect to the Company or its
subsidiaries or any of their respective securities for purposes of foreign, United States Federal
and state securities laws (all such information and documentation being “Public Lender
Information”). Any information and documentation that is not Public Lender Information is referred
to herein as “Private Lender Information”. You further agree that each document to be disseminated
by the Financing Parties to any Lender in connection with the Facilities will, at the request of
the Financing Parties, be identified by you as either (i) containing Private Lender Information or
(ii) containing solely Public Lender Information. No Private Lender Information shall be
disseminated unless and until the recipient agrees in a writing satisfactory to you and us that
such recipient will hold such information in confidence and will neither disclose such information
to third parties nor use such information other than in evaluating whether to participate in the
Facilities.



The Financing Parties will manage all aspects of any syndication, including decisions as to
the selection of institutions to be approached and when they will be approached, when their
commitments will be accepted, which institutions will participate, the allocation of the
commitments among the Lenders, any naming rights and the amount and distribution of fees among the
Lenders. To assist the Financing Parties in their syndication efforts, you agree promptly to
prepare and provide to the Financing Parties all information with respect to the Company and its
subsidiaries, the Transactions and the other transactions contemplated hereby, including all
financial information and projections (the “Projections”), as we may reasonably request.



4. Information.



You hereby represent and covenant (and it shall be a condition to our commitment hereunder and
agreement to perform the services described herein) that (a) all information other than the
Projections (the “Information”) that has been or will be made available to the Financing Parties by
or on behalf of you or any of your representatives is or will be, when furnished, complete and
correct in all material respects and does not or will not, when furnished, contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements contained therein not materially misleading in light of the circumstances under which
such statements are made and (b) the Projections that have been or will be made available to the
Financing Parties by or on behalf of you or any of your representatives have been or will be
prepared in good faith based upon accounting principles consistent with GAAP and upon assumptions
that are reasonable at the time made and at the time the related Projections are made available to
the Financing Parties. You agree that if at any time prior to the closing of the Facilities any of
the representations in the preceding sentence would be incorrect if the Information and Projections
were being furnished, and such representations were being made, at such time, then you will
promptly supplement the Information and the Projections so that such representations will be
correct under those circumstances. In arranging and syndicating the Facilities, we will be
entitled to use and rely primarily on the Information and the Projections without responsibility
for independent verification thereof.



5. Fees.



As consideration for the Financing Parties’ commitment hereunder and agreement to perform the
services described herein, you agree to pay to the Financing Parties the fees set forth in this
Commitment Letter and in the fee letter dated the date hereof and delivered herewith with respect
to the Facilities (the “Fee Letter”).



6. Conditions Precedent.



The Financing Parties’ commitment hereunder and agreement to perform the services described
herein are subject to (a) our completion of, and our satisfaction in all respects with the results
of, our business, legal, tax, accounting and environmental due diligence investigation of the
Company and its subsidiaries, the Transactions and the other transactions contemplated hereby, (b)
our not having discovered or otherwise having become aware of any information not previously
disclosed to us that we believe to be inconsistent in a material and adverse manner with our
understanding, based on the information provided to us prior to the date hereof, of (i) the
business, assets, liabilities, operations, condition (financial or otherwise), operating results,
Projections or prospects of the Company and its subsidiaries, taken as a whole, or (ii) the
Transactions, (c) there not having occurred any event, change or condition since December 31, 2003
(the date of the most recent audited financial statements of the Company delivered to the Financing
Parties as of the date hereof) that, individually or in the aggregate, has had, or could reasonably
be expected to have, a material adverse effect on the business, assets, liabilities, operations,
condition (financial or otherwise), operating results, Projections or prospects of the Company and
its subsidiaries taken as a whole (it being agreed that neither a delisting of the Company’s
securities from trading on the New York Stock Exchange nor any restatement of the Company’s audited
financial statements for the 2004 fiscal year as previously presented to the Financing Parties
shall be considered such an event, change or condition), (d) the absence of a disruption or adverse
change in financial, banking or capital markets generally, or in the market for new issuances of
leveraged loans or high yield securities in particular, in each case that, in the Financing
Parties’ judgment, could reasonably be expected to impair the syndication of the Facilities,
(e) our satisfaction that, prior to and during the syndication of the Facilities, there shall be no
other issues of debt securities or commercial bank or other credit facilities of the Company or its
subsidiaries being announced, offered, placed or arranged, (f) the negotiation, execution and
delivery of definitive documentation with respect to the Facilities satisfactory to the Financing
Parties and their counsel, (g) the Financing Parties’ having been afforded a period of at least 45
consecutive days following the launch of the general syndication of the Facilities and immediately
prior to the Closing Date to syndicate the Facilities; (h) your compliance with the terms of this
Commitment Letter and the Fee Letter, and (i) the other conditions set forth or referred to in the
Term Sheet and the other exhibits hereto.



7. Indemnification; Expenses.



You agree (a) to indemnify and hold harmless each of us and our respective affiliates and
their respective officers, directors, employees, agents, advisors, controlling persons, members and
successors and assigns (each, an “Indemnified Person”) from and against any and all losses, claims,
damages, liabilities and expenses, joint or several, to which any such Indemnified Person may
become subject arising out of or in connection with this Commitment Letter, the Fee Letter, the
Transactions, the Facilities or any related transaction or any claim, litigation, investigation or
proceeding relating to any of the foregoing, regardless of whether any such Indemnified Person is a
party thereto (and regardless of whether such matter is initiated by a third party or by the
Borrowers or any of their affiliates), and to reimburse each such Indemnified Person upon demand
for any reasonable legal or other expenses incurred in connection with investigating or defending
any of the foregoing, provided that the foregoing indemnity will not, as to any Indemnified Person,
apply to losses, claims, damages, liabilities or related expenses to the extent they are found in a
final, non-appealable judgment of a court of competent jurisdiction to have resulted primarily from
the willful misconduct or gross negligence of such Indemnified Person, and (b) to reimburse us from
time to time, upon presentation of a summary statement, for all reasonable out-of-pocket expenses
(including but not limited to expenses of our due diligence investigation, consultants’ and other
professionals’ fees, syndication expenses, travel expenses and fees, disbursements and other
charges of counsel), in each case, incurred in connection with the Facilities and the preparation,
negotiation and enforcement of this Commitment Letter, the Fee Letter, the definitive documentation
for the Facilities and any ancillary documents and security arrangements in connection therewith.
Notwithstanding any other provision of this Commitment Letter, no Indemnified Person shall be
liable for any indirect, special, punitive or consequential damages in connection with its
activities related to the Facilities.



8. Sharing Information; Absence of Fiduciary Relationship; Affiliate Activities.



You acknowledge that National City Bank, Credit Suisse and their affiliates may be providing
debt financing, equity capital or other services (including financial advisory services) to other
companies in respect of which you may have conflicting interests regarding the transactions
described herein or otherwise. Neither we nor any of our affiliates will furnish confidential
information obtained from you to other companies. You also acknowledge that neither we nor any of
our affiliates has any obligation to use in connection with the transactions contemplated by this
Commitment Letter, or to furnish to you, confidential information obtained by us from other
companies.



You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship
between you and National City Bank or Credit Suisse is intended to be or has been created in
respect of any of the transactions contemplated by this Commitment Letter, irrespective of whether
National City Bank and/or Credit Suisse and/or their respective affiliates have advised or are
advising you on other matters, (b) National City Bank and Credit Suisse, on the one hand, and you
and the Borrowers, on the other hand, have an arms-length business relationship that does not
directly or indirectly give rise to, nor do you or the Borrowers rely on, any fiduciary duty on the
part of National City Bank or Credit Suisse, (c) you are capable of evaluating and understanding,
and you understand and accept, the terms, risks and conditions of the transactions contemplated by
this Commitment Letter, (d) you have been advised that National City Bank and Credit Suisse and
their respective affiliates are engaged in a broad range of transactions that may involve interests
that differ from your interests and that neither National City Bank nor Credit Suisse has any
obligation to disclose such interests and transactions to you by virtue of any fiduciary, advisory
or agency relationship, and (e) you waive, to the fullest extent permitted by law, any claims you
may have against National City Bank or Credit Suisse for breach of fiduciary duty or alleged breach
of fiduciary duty and agree that neither National City Bank nor Credit Suisse shall have any
liability (whether direct or indirect) to you in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of you, including your
stockholders, employees or creditors. 



You acknowledge that CS Securities is a full service securities firm engaged in securities
trading and brokerage activities as well as providing investment banking and other financial
services. In the ordinary course of business, CS Securities and its affiliates may provide
investment banking and other financial services to, and/or acquire, hold or sell, for their own
accounts and the accounts of customers, equity, debt and other securities and financial instruments
(including bank loans and other obligations) of, you, the Borrowers and other companies with which
you or the Borrowers may have commercial or other relationships. With respect to any securities
and/or financial instruments so held by CS Securities or any of its affiliates or customers, all
rights in respect of such securities and financial instruments, including any voting rights, will
be exercised by the holder of the rights, in its sole discretion.



9. Assignments, Amendments, Governing Law, Etc.



This Commitment Letter shall not be assignable by you without the prior written consent of
National City Bank, CS and CS Securities (and any attempted assignment without such consent shall
be null and void), is intended to be solely for the benefit of the parties hereto (and Indemnified
Persons), and is not intended to confer any benefits upon, or create any rights in favor of, any
person other than the parties hereto (and Indemnified Persons). Each of National City Bank and CS
may assign its commitment hereunder to one or more prospective Lenders, whereupon National City
Bank or CS, as applicable, shall be released from the portion of its commitment hereunder so
assigned. Any and all obligations of, and services to be provided by, National City Bank or Credit
Suisse hereunder (including, without limitation, its commitment) may be performed and any and all
rights of National City Bank or Credit Suisse hereunder may be exercised by or through any of their
respective affiliates or branches. This Commitment Letter may not be amended or any provision
hereof waived or modified except by an instrument in writing signed by National City Bank, CS, CS
Securities and you. This Commitment Letter may be executed in any number of counterparts, each of
which shall be an original and all of which, when taken together, shall constitute one agreement.
Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile
transmission shall be effective as delivery of a manually executed counterpart hereof. Section
headings used herein are for convenience of reference only, are not part of this Commitment Letter
and are not to affect the construction of, or to be taken into consideration in interpreting, this
Commitment Letter. You acknowledge that information and documents relating to the Facilities may
be transmitted through Syndtrak, Intralinks, the internet, e-mail or similar electronic
transmission systems and that neither National City Bank nor Credit Suisse shall be liable for any
damages arising from the unauthorized use by others of information or documents transmitted in such
manner, unless such unauthorized use resulted primarily from the willful misconduct or gross
negligence of National City Bank and/or Credit Suisse, as found in a final, non-appealable judgment
of a court of competent jurisdiction. Each of National City Bank and Credit Suisse may place
advertisements in financial and other newspapers and periodicals or on a home page or similar place
for dissemination of information on the Internet or worldwide web as it may choose, and circulate
similar promotional materials, after the closing of the Transactions in the form of a “tombstone”
or otherwise describing the names of the Company and its affiliates (or any of them), and the
amount, type and closing date of such Transactions, all at National City Bank’s or Credit Suisse’s
expense, as applicable. This Commitment Letter and the Fee Letter supersede all prior
understandings, whether written or oral, between us with respect to the Facilities. THIS
COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.



10. Jurisdiction.



Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and
its property, to the exclusive jurisdiction of any New York State court or Federal court of the
United States of America sitting in New York City, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the
transactions contemplated hereby or thereby, and agrees that all claims in respect of any such
action or proceeding may be heard and determined only in such New York State court or, to the
extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally
and effectively do so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter
or the transactions contemplated hereby or thereby in any New York State court or in any such
Federal court, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court, and (d) agrees that a
final judgment in any such action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law. Service of any
process, summons, notice or document by registered mail addressed to you at the address above shall
be effective service of process against you for any suit, action or proceeding brought in any such
court.



11. Waiver of Jury Trial.



EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF
THIS COMMITMENT LETTER, THE FEE LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.



12. Confidentiality.



This Commitment Letter is delivered to you on the understanding that neither this Commitment
Letter nor the Fee Letter nor any of their terms or substance, nor the activities of National City
Bank and Credit Suisse pursuant hereto, shall be disclosed, directly or indirectly, to any other
person except (a) to your officers, directors, employees, attorneys, accountants and advisors on a
confidential and need-to-know basis, (b) as required by applicable law or compulsory legal process
(in which case you agree to inform us promptly thereof prior to such disclosure) or (c) with
respect to the Commitment Letter only (and not the Fee Letter), following the execution and
delivery hereof by you, to other third parties, including the filing thereof with the United States
Securities and Exchange Commission.



Notwithstanding anything herein to the contrary, any party to this Commitment Letter (and any
employee, representative or other agent of such party) may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transactions contemplated by
this Commitment Letter and the Fee Letter and all materials of any kind (including opinions or
other tax analyses) that are provided to it relating to such tax treatment and tax structure,
except that (i) tax treatment and tax structure shall not include the identity of any existing or
future party (or any affiliate of such party) to this Commitment Letter or the Fee Letter, and (ii)
no party shall disclose any information relating to such tax treatment and tax structure to the
extent nondisclosure is reasonably necessary in order to comply with applicable securities laws.
For this purpose, the tax treatment of the transactions contemplated by this Commitment Letter and
the Fee Letter is the purported or claimed U.S. Federal income tax treatment of such transactions
and the tax structure of such transactions is any fact that may be relevant to understanding the
purported or claimed U.S. Federal income tax treatment of such transactions.



13. Surviving Provisions.



The compensation, reimbursement, indemnification, confidentiality, governing law, jurisdiction
and waiver of jury trial provisions contained herein and in the Fee Letter shall remain in full
force and effect regardless of whether definitive financing documentation shall be executed and
delivered and notwithstanding the termination of this Commitment Letter or National City Bank’s or
Credit Suisse’s commitments and agreements hereunder.



14. PATRIOT Act Notification.



Each of National City Bank and Credit Suisse hereby notifies you that pursuant to the
requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001)
(the “PATRIOT Act”), National City Bank, Credit Suisse and each Lender is required to obtain,
verify and record information that identifies the Borrowers, which information includes the name,
address, tax identification number and other information regarding the Borrowers that will allow
National City Bank, Credit Suisse or such Lender to identify the Borrowers in accordance with the
PATRIOT Act. This notice is given in accordance with the requirements of the PATRIOT Act and is
effective as to National City Bank, Credit Suisse and each Lender.



15. Acceptance and Termination.



If the foregoing correctly sets forth our agreement with you, please indicate your acceptance
of the terms of this Commitment Letter and of the Fee Letter by returning to us executed
counterparts hereof and of the Fee Letter not later than 5:00 p.m., New York City time, on March
24, 2006. Each of National City Bank’s and Credit Suisse’s commitment hereunder and agreements
contained herein will expire at such time in the event that National City Bank and Credit Suisse
have not received such executed counterparts in accordance with the immediately preceding sentence.
In the event that the Closing Date does not occur on or before June 29, 2006 then this Commitment
Letter and each of National City Bank’s and Credit Suisse’s commitment and undertakings hereunder
shall automatically terminate unless each of National City Bank and Credit Suisse shall, in its
discretion, agree to an extension. Before such date, each of National City Bank and Credit Suisse
may terminate this Commitment Letter and National City Bank’s and Credit Suisse’s respective
commitments and undertakings hereunder if any event occurs or information becomes available that,
in its judgment, results or is likely to result in the failure to satisfy any condition precedent
set forth or referred to in this Commitment Letter.



2



We are pleased to have been given the opportunity to assist you in connection with the
financing for the Transactions.




Very truly yours,




NATIONAL CITY BANK




By: /s/ Robert S. Coleman     

Name: Robert S. Coleman

Title: Senior Vice President





By: /s/ Diego Tobon     

Name: Diego Tobon

Title: Managing Director





CREDIT SUISSE, CAYMAN ISLANDS BRANCH




By: /s/ Joel Glodowski

Name: Joel Glodowski

Title: Managing Director





By: /s/ Brian T. Caldwell     

Name: Brian T. Caldwell

Title: Director





CREDIT SUISSE SECURITIES (USA) LLC




By: /s/ Richard H. Whitney

Name: Richard H. Whitney

Title: Managing Director




Accepted and agreed to as of



the date first above written:



FERRO CORPORATION



By: /s/ Thomas M. Gannon     





Name: Thomas M. Gannon

Title: Chief Financial Officer

3



Ferro Corporation



Senior Credit Facilities




Summary of Principal Terms and Conditions




	 	 	 	 	 
	Borrowers:
	 	Ferro Corporation, an Ohio corporation (the
“Company”), its subsidiaries and, for purposes of
the $100,000,000 portion of the Revolving Facility
available for multi-currency borrowings described
below, certain of its subsidiaries organized in
the Netherlands and Japan (the “Foreign
Borrowers”, together with the Company,
collectively, the “Borrowers”).
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Transactions:
	 	The Borrowers intend (a) to refinance certain
existing indebtedness (including all their funded
indebtedness) of the Company and its subsidiaries
including the Credit Agreement, dated as of August
31, 2001 (as amended or otherwise modified prior
to the date hereof, the “Existing Credit
Agreement”), among the various financial
institutions party thereto as lenders, and
National City Bank as administrative agent (the
“Refinancing”) and (b) to pay reasonable fees and
expenses incurred in connection with the foregoing
(including prepayment premiums and expenses
resulting from the Refinancing) and any related
transactions (the “Transaction Costs”). In
connection with the foregoing, the Borrowers
desire to obtain the senior credit
facilities described below under the caption
“Facilities”. The transactions described in this
paragraph are collectively referred to herein as
the “Transactions”.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Administrative Agents:
	 	National City Bank, acting through one or more of
its branches or affiliates (“National City Bank”),
will act as sole administrative agent for the
Revolving Facility for a syndicate of banks,
financial institutions and other institutional
lenders (together with National City Bank and CS
(as defined below), the “Lenders”), and will
perform the duties customarily associated with
such role.
Credit Suisse, acting through one or more of its
branches or affiliates (“CS”, together with
National City Bank, the “Agents”), will act as
sole administrative agent for the Term Facility
for a syndicate of Lenders, and will perform the
duties customarily associated with such role.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Collateral Agent:
	 	National City Bank.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Joint Bookrunner and Joint Lead Arranger:
	 	National City Bank and Credit Suisse Securities
(USA) LLC (“CS Securities”, together with National
City Bank and CS, the “Financing Parties” will act
as joint bookrunners and joint lead arrangers for
the Facilities (the “Arrangers”) and will perform
the duties customarily associated with such roles.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Documentation Agent:
	 	At the option of the Arrangers, one or more
financial institutions identified by the Arrangers
and acceptable to the Borrowers (the
“Documentation Agent”).
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Facilities:

	 	(A)
	 	A senior delayed-draw term loan facility in an

aggregate principal amount of up to $[400,000,000]

(the “Term Facility”).
	 

	 	

	 	

	 
	 	 	 	 
	
 
	 	(B)
	 	A multi-currency senior revolving credit facility

in an aggregate principal amount of up to

$[300,000,000] (the “Revolving Facility” and,

together with the Term Facility, the

“Facilities”), of which up to (a) $[50,000,000]

will be available in the form of letters of credit

(b) $[15,000,000] will be available for swingline

loans and (c) the U.S. Dollar equivalent of

[$100,000,000] will be available for

multi-currency borrowings made to the Foreign

Borrowers.
	 
	 	 	 	 
	Purpose:

	 	(A)
	 	The proceeds of the Term Facility will be used by

the Borrowers on the date of the initial borrowing

under the Facilities (the “Closing Date”) for the

purposes set forth under “Transactions” above.
	 

	 	 	 	 
	 
	 	 	 	 
	
 
	 	(B)
	 	The proceeds of the Revolving Facility will be

used by the Borrowers on the Closing Date (i) for

the purposes set forth under “Transactions” above

and (ii) for working capital and general corporate

purposes, including making capital expenditures.

Letters of credit will be used solely to support

payment obligations incurred in the ordinary

course of business by the Company and its

subsidiaries.
	
 
	 	 	 	 
	 
	 	 	 	 
	Availability:

	 	(A)
	 	Prior to 364 days from the Closing Date, the

Company shall borrow the balance of the Term

Facility in increments of at least $10,000,000.

Amounts borrowed under the Term Facility that are

repaid or prepaid may not be reborrowed.
	 

	 	

	 	

	 
	 	 	 	 
	
 
	 	(B)
	 	Loans under the Revolving Facility will be

available at any time prior to the final maturity

of the Revolving Facility, in minimum principal

amounts to be agreed upon. Amounts repaid under

the Revolving Facility may be reborrowed.
	 
	 	 	 	 
	Interest Rates and Fees:
	 	As set forth on Annex I hereto.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Default Rate:
	 	The applicable interest rate plus 2.0% per annum.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Letters of Credit:
	 	Letters of credit under the Revolving Facility
will be issued by National City Bank (the “Issuing
Bank”). Each letter of credit shall expire not
later than the earlier of (a) 12 months after its
date of issuance and (b) the fifth business day
prior to the final maturity of the Revolving
Facility; provided that any letter of credit may
provide for renewal thereof for additional periods
of up to 12 months (which in no event shall extend
beyond the date referred to in clause (b) above).
Drawings under any letter of credit shall be
reimbursed by the applicable Borrower on the same
business day. To the extent that such Borrower
does not reimburse the Issuing Bank on the same
business day, the Lenders under the Revolving
Facility shall be irrevocably obligated to
reimburse the Issuing Bank pro rata based upon
their respective Revolving Facility commitments.
The issuance of all letters of credit shall be
subject to the customary procedures of the Issuing
Bank.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	
 
	 	 	 	Term Facility
	
 
	 	 	 	 
	Final Maturity




and Amortization:




	 	(A)
	 	The Term Facility will mature on the date that is

6 years after the Closing Date, and will amortize

in equal quarterly installments in an aggregate

annual amount equal to 1% of the original

principal amount of the Term Facility during the

first 5 years thereof with the balance payable in

equal quarterly installments during the last year

of the Term Facility.
	 
	 	 	 	 
	
 
	 	(B)
	 	Revolving Facility
	
 
	 	 	 	 
	
 
	 	 	 	The Revolving Facility will mature and the

commitments thereunder will terminate on the date

that is 5 years after the Closing Date.
	 
	 	 	 	 
	Guarantees:
	 	All obligations of the Borrowers under the
Facilities and under any interest rate protection
or other hedging arrangements entered into with
the Arrangers, a Lender or any affiliate of any of
the foregoing (“Hedging Arrangements”) will be
unconditionally guaranteed (the “Guarantees”) by
the Company and by each of its existing and
subsequently acquired domestic and, to the extent
no material adverse tax consequences to the
Company (as determined by the Arrangers) would
result therefrom, foreign subsidiary of the
Company (the “Subsidiary Guarantors”).
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Security:
	 	The Facilities, the Guarantees and any Hedging
Arrangements will be secured by a pledge of (i)
100% (in the case of each of the Company’s
material domestic subsidiaries) and 65% (in the
case of each of the Company’s material foreign
subsidiaries) of the issued and outstanding
capital stock of each of the Company’s material
subsidiaries and (ii) all of the tangible and
intangible assets (other than trade receivables
and related collateral, credit support and similar
rights sold pursuant to the Company’s existing
accounts receivable securitization program (in
which any residual interest will be granted) and
excluding certain agreed upon inventory subject to
its metals leases) of the Company and each of its
material domestic subsidiaries (collectively, the
“Collateral”).
All the above-described pledges, security
interests and mortgages shall be created on terms,
and pursuant to documentation, satisfactory to the
Lenders, and none of the Collateral shall be
subject to any other liens, subject to customary
and limited exceptions to be agreed upon.
Notwithstanding the foregoing, in the event that a
portion of the proceeds of the Facilities is not
used to repurchase the Company’s outstanding
senior notes and debentures, then such instruments
also shall be granted security interests in
accordance with the Company’s Indenture dated as
of March 25, 1998.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Mandatory Prepayments:
	 	Loans under the Term Facility shall be prepaid
with (a) 50% of Excess Cash Flow (to be defined),
which shall only be required to be paid so long as
the ratio of total debt to EBITDA is greater than
or equal to 3.50:1.0, (b) 100% of the net cash
proceeds of all asset sales or other dispositions
of property by the Company and its subsidiaries
(including insurance and condemnation proceeds)
(subject to exceptions and reinvestment provisions
to be agreed upon, including, without limitation,
an exception for asset sale proceeds used to
consummate restructurings of assets in Europe),
(c) 100% of the net cash proceeds of issuances,
offerings or placements of debt obligations of the
Company and its subsidiaries and (d) 80% of the
net cash proceeds of issuances of equity
securities of the Company and its subsidiaries,
with a reduction based upon achievement and
maintenance of a leverage ratio to be agreed upon.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	 
	 	The above-described mandatory prepayments shall be
applied in inverse order to the remaining
amortization payments under the Term Facility.
	 
	 	 	 	 
	Voluntary Prepayments and Reductions in
Commitments:
	 	Voluntary reductions of the unutilized portion of
the commitments under the Facilities and
prepayments of borrowings thereunder will be
permitted at any time, in minimum principal
amounts to be agreed upon, without premium or
penalty, subject to reimbursement of the Lenders’
redeployment costs in the case of a prepayment of
Adjusted LIBOR borrowings other than on the last
day of the relevant interest period. All
voluntary prepayments of the Term Facility will be
applied pro rata to the remaining amortization
payments under the Term Facility.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Representations and Warranties:
	 	Usual for facilities and transactions of this type
and others to be reasonably specified by the
Arrangers, including, without limitation, accuracy
of financial statements and other information; no
material adverse change (which shall not include a
delisting of the Company’s securities from trading
on the New York Stock Exchange or any restatement
of the Company’s 2004 audited financial statements
as previously presented to the Arrangers); absence
of litigation; no violation of agreements or
instruments; compliance with laws (including
ERISA, margin regulations and environmental laws);
payment of taxes; ownership of properties;
inapplicability of the Investment Company Act;
solvency; effectiveness of governmental approvals;
labor matters; environmental and other regulatory
matters; and validity, priority and perfection of
security interests in the Collateral.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Conditions Precedent to Initial Borrowing:
	 	Usual for facilities and transactions of this type
and others to be reasonably specified by the
Arrangers, including, without limitation, delivery
of satisfactory legal opinions, corporate
documents and officers’ and public officials’
certifications; receipt of satisfactory lien and
judgment searches; execution of the Guarantees,
which shall be in full force and effect; evidence
of authority; payment of fees and expenses; and
obtaining of satisfactory insurance.
The initial borrowing under the Facilities will
also be subject to the applicable conditions
precedent set forth in Exhibit B to the Commitment
Letter.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Conditions Precedent to all Borrowings:
	 	Delivery of notice, accuracy of representations
and warranties, and absence of defaults.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Affirmative Covenants:
	 	Usual for facilities and transactions of this type
and others to be reasonably specified by the
Arrangers (to be applicable to the Company and its
subsidiaries), including, without limitation,
maintenance of corporate existence and rights;
maintenance of corporate separateness; performance
of obligations; delivery of consolidated financial
statements and other information, including
information required under the PATRIOT Act;
delivery of notices of default, litigation, ERISA
events and material adverse change; maintenance of
properties in good working order; maintenance of
satisfactory insurance; compliance with laws;
inspection of books and properties; maintenance of
hedging arrangements satisfactory to the
Arrangers; further assurances; payment of taxes;
filing by the Company of its (i)
Form 10-K and 10-Qs for fiscal year 2004, in each
case with the United States Securities and
Exchange Commission (the “SEC”), on or prior to
June 30, 2006, and (ii) Form 10-K and 10-Qs for
fiscal year 2005 and Form 10-Q for the fiscal
quarters ending March 31, 2006, June 30, 2006 and
September 30, 2006, in each case with the SEC on
or prior to December 31, 2006, and within a
to-be-determined period thereafter, maintenance by
the Company of a rating of the Facilities by each
of Standard & Poor’s Ratings Service (“S&P”) and
Moody’s Investors Service, Inc. (“Moody’s”).
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Negative Covenants:
	 	Usual for facilities and transactions of this type
and others to be reasonably specified by the
Arrangers (to be applicable to the Company and its
subsidiaries), including, without limitation
(subject to baskets to be negotiated), limitations
on dividends on, and redemptions and repurchases
of, capital stock and other restricted payments;
limitations on prepayments, redemptions and
repurchases of debt; limitations on liens and
sale-leaseback transactions; limitations on loans
and investments; limitations on debt, guarantees
and hedging arrangements; limitations on mergers,
acquisitions and asset sales; limitations on
transactions with affiliates; limitations on
changes in business conducted by the Company and
its subsidiaries; limitations on restrictions on
ability of subsidiaries to pay dividends or make
distributions; limitations on amendments of debt
and other material agreements; and limitations on
capital expenditures.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Selected Financial Covenants:
	 	To include: (a) maximum ratios of Total Debt to
EBITDA and (b) minimum fixed charge coverage
ratios, in each case with levels and definitions
to be agreed.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Events of Default:
	 	Usual for facilities and transactions of this type
(subject, where appropriate, to thresholds and
grace periods to be agreed upon) and others to be
reasonably specified by the Arrangers, including,
without limitation, nonpayment of principal,
interest or other amounts; violation of covenants;
incorrectness of representations and warranties in
any material respect; cross default and cross
acceleration; bankruptcy; material judgments;
ERISA events; actual or asserted invalidity of
guarantees or security documents; and Change of
Control (to be defined).
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Voting:
	 	Amendments and waivers of the definitive credit
documentation will require the approval of Lenders
holding more than 50% of the aggregate amount of
the loans and commitments under the Facilities
(with certain amendments and waivers also
requiring class votes), except that the consent of
each Lender shall be required with respect to,
among other things, (a) increases in the
commitment of such Lender, (b) reductions of
principal, interest or fees payable to such
Lender, (c) extensions of final maturity or
scheduled amortization of the loans or commitments
of such Lender and (d) releases of guarantors
(other than in connection with permitted asset
sales) or all or substantially all of the
Collateral.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Cost and Yield Protection:
	 	Usual for facilities and transactions of this type.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Assignments and Participations:
	 	The Lenders will be permitted to assign (a) loans
under the Term Facility without the consent of
(but with notice to) the Company and (b) loans and
commitments under the Revolving Facility with the
consent of the Company, the swingline lender and
the Issuing Bank, in each case, not to be
unreasonably withheld or delayed; provided that
such consent of the Company shall not be required
(i) if such assignment is made to another Lender
or an affiliate or approved fund of a Lender or
(ii) after the occurrence and during the
continuance of an event of default. All
assignments will require the consent of the
applicable Administrative Agent, not to be
unreasonably withheld or delayed. Each assignment
will be in an amount of an integral multiple of
$1,000,000. Assignments will be by novation and
will not be required to be pro rata between the
Facilities.
The Lenders will be permitted to sell
participations in loans and commitments without
restriction. Voting rights of participants shall
be limited to matters in respect of (a) increases
in commitments of such participant, (b) reductions
of principal, interest or fees payable to such
participant, (c) extensions of final maturity or
scheduled amortization of the loans or commitments
underlying the participation of such participant
and (d) releases of guarantors (other than in
connection with permitted asset sales) or all or
substantially all of the Collateral.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Expenses and Indemnification:
	 	The Borrowers will indemnify the Arrangers, the
Administrative Agents, the Documentation Agent,
the Lenders, their respective affiliates,
successors and assigns and the officers,
directors, employees, agents, advisors,
controlling persons and members of each of the
foregoing (each, an “Indemnified Person”) and hold
them harmless from and against all costs, expenses
(including reasonable fees, disbursements and
other charges of counsel) and liabilities of such
Indemnified Person arising out of or relating to
any claim or any litigation or other proceeding
(regardless of whether such Indemnified Person is
a party thereto and regardless of whether such
matter is initiated by a third party or by the
Company or any of its affiliates) that relates to
the Transactions, including the financing
contemplated hereby, provided that no Indemnified
Person will be indemnified for any cost, expense
or liability to the extent determined in the
final, non-appealable judgment of a court of
competent jurisdiction to have resulted primarily
from its gross negligence or willful misconduct.
In addition, all out-of-pocket expenses
(including, without limitation, fees,
disbursements and other charges of counsel) of the
Arrangers, the Administrative Agents, the
Documentation Agent and the Lenders for
enforcement costs and documentary taxes associated
with the Facilities will be paid by the Borrowers.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Governing Law and Forum:
	 	New York.
	 
	 	 	 	 
	 
	 	 
	 
	 	 	 	 
	Counsel to Arrangers:
	 	Mayer, Brown, Rowe & Maw LLP.
	 
	 	 	 	 
	 
	 	 






	 	 	 	 	 
	 
	 	The interest rates under the Facilities will be as follows:

	 
	 	At the option of the Borrowers, Adjusted LIBOR or ABR plus,

	 
	 	in each case, the Applicable Margin (as defined below).

	 
	 	The Applicable Margin shall be, at any time, the rate per

	 
	 	annum set forth in the table below opposite the senior,

	 
	 	unsecured long-term rating for borrowed money of the

	 
	 	Borrowers that is not guaranteed by any other person or

	 
	 	entity or subject to any other credit enhancement (the “Index

	 
	 	Debt”), as determined by S&Pand Moody’s.  Split ratings will
	 
	 	be addressed in the manner set forth in the Existing Credit

	 
	 	Agreement.  The Applicable Margin for ABR Loans and Prime

	 
	 	Rate Advances shall be increased by 0.50% so long as the

	 
	 	Borrowers or any Subsidiary Guarantor fails to comply with

	 
	 	its filing requirements with the United States Securities and

	 
	 	Exchange Commission.

	 
	 	Index Debt Rating
	 
	 	Adjusted LIBOR
	 
	 	ABR
	 
	 	Ba1/BB+

	 
	 	 	1.50% - 1.75	%
	 
	 	 	0.50% - 0.75	%
	 
	 	Ba2/BB

	 
	 	 	1.75% - 2.00	%
	 
	 	 	0.75% - 1.00	%
	 
	 	Ba3/BB-

	 
	 	 	2.00% - 2.25	%
	 
	 	 	1.00% - 1.25	%
	 
	 	 	1B1/B+	 
	 
	 	 	2.50% - 2.75	%
	 
	 	 	1.50% - 1.75	%
	 
	 	At or below B2/B

	 
	 	 	3.00% - 3.25	%
	 
	 	 	2.00% - 2.25	%
	 
	 	The Borrowers may elect interest periods of 1, 2, 3 or 6

	 
	 	months for Adjusted LIBOR borrowings.

	 
	 	In the event of a split rating, the lower of the two ratings

	 
	 	shall apply.

	 
	 	Calculation of interest shall be on the basis of the actual

	 
	 	days elapsed in a year of 360 days (or 365 or 366 days, as

	 
	 	the case may be, in the case of ABR loans based on the Prime

	 
	 	Rate) and interest shall be payable at the end of each

	 
	 	interest period and, in any event, at least every

	 
	 	three months.

	 
	 	ABR is the Alternate Base Rate, which is the higher of

	 
	 	National City Bank’s Prime Rate and the Federal Funds

	 
	 	Effective Rate plus 1/2 of 1.0%.

	Interest Rates: Adjuste
	 	d LIBOR will at all times include statutory reserves.

	 
	 	 	 	 
	 
	 	A per annum fee equal to the spread over Adjusted LIBOR under

	 
	 	the Revolving Facility will accrue on the aggregate face

	 
	 	amount of outstanding letters of credit under the Revolving

	 
	 	Facility, payable in arrears at the end of each quarter and

	 
	 	upon the termination of the Revolving Facility, in each case

	 
	 	for the actual number of days elapsed over a 360-day year.

	 
	 	Such fees shall be distributed to the Lenders participating

	 
	 	in the Revolving Facility pro rata in accordance with the

	 
	 	amount of each such Lender’s Revolving Facility commitment.

	 
	 	In addition, the Borrowers shall pay to the Issuing Bank, for

	 
	 	its own account, (a) a fronting fee equal to a percentage per

	 
	 	annum to be agreed upon of the aggregate face amount of

	 
	 	outstanding letters of credit, payable in arrears at the end

	 
	 	of each quarter and upon the termination of the Revolving

	 
	 	Facility, calculated based upon the actual number of days

	 
	 	elapsed over a 360-day year, and (b) customary issuance and

	Letter of Credit Fee:
	 	administration fees.

	 
	 	 	 	 
	 
	 	A percentage per annum (based on the Index Debt Rating set

	 
	 	forth below) on the undrawn portion of the commitments in

	 
	 	respect of the Revolving Facility, payable quarterly in

	 
	 	arrears after the Closing Date and upon the termination of

	 
	 	the commitments, calculated based on the number of days

	 
	 	elapsed in a 360-day year.

	 
	 	Index Debt Rating

	 
	 	Commitment Fee

	 
	 	Ba1/BB+

	 
	 	 	.250	%
	 
	 	Ba2/BB

	 
	 	 	.375	%
	 
	 	Below Ba2/BB

	Commitment Fees:
	 	 	.500	%
	 
	 	 	 	 
	 
	 	The Term Facility Fee shall be, at any time, the rate per

	 
	 	annum set forth in the table below per annum on the undrawn

	 
	 	portion of the commitments in respect of the Term Facility,

	 
	 	payable quarterly in arrears after the Closing Date and upon

	 
	 	the termination of the commitments and at the end of the Term

	 
	 	Facility availability period, calculated based on the number

	 
	 	of days elapsed in a 360-day year.

	 
	 	Period
	 
	 	Fee
	 
	 	Closing Date through and including 90th day

	 
	 	following the Closing Date

	 
	 	 	0.75	%
	 
	 	91st day following the Closing Date through and
	 
	 	including 180th day following the Closing Date

	 
	 	 	1.00	%
	 
	 	181st day following the Closing Date through and
	 
	 	including the 270th day following the Closing Date

	 
	 	 	1.25	%
	 
	 	271st day following the Closing Date and thereafter
	Term Facility Fee
	 	 	1.50	%
	 
	 	 	 	 






4




FERRO CORPORATION




Senior Credit Facilities




Summary of Additional Conditions Precedent2




Except as otherwise set forth below, the initial borrowing under each of the Facilities shall
be subject to the following additional conditions precedent:



1. The Transactions shall be consummated simultaneously with the closing under the Facilities
in accordance with applicable law and on the terms described in the Term Sheet; all other related
documentation in connection therewith shall be satisfactory to the Arrangers; and the Arrangers
shall be satisfied with the capitalization of the Company and its subsidiaries after giving effect
to the Transactions.



2. All amounts due or outstanding in respect of the Existing Credit Agreement shall have been
paid in full, all commitments in respect thereof terminated and all guarantees thereof and security
therefor (if any) discharged and released. After giving effect to the Transactions and any other
transactions contemplated hereby, the Company and its subsidiaries shall have outstanding no
indebtedness or preferred stock other than (a) the loans and other extensions of credit under the
Facilities, and (b)  other indebtedness and preferred stock to be agreed upon.



3. The Arrangers shall have received (a) U.S. GAAP unaudited consolidated balance sheets and
related statements of income, stockholders’ equity and cash flows of the Company for fiscal year
2005 and the fiscal quarters most recently available since the end of such fiscal year and (b) a
draft of the Company’s SEC Form 10-K for fiscal year 2004, which financial statements shall not be
materially inconsistent with the financial statements or forecasts previously provided to the
Arrangers.



4. The Arrangers shall be satisfied that (a) the Company’s consolidated pro forma EBITDA for
the four-fiscal quarter period most recently ended prior to the Closing Date (prepared in
accordance with Regulation S-X under the Securities Act of 1933, as amended, and with such further
adjustments in form and substance satisfactory to the Arrangers, in each case, to give pro forma
effect to the Transactions as if they had occurred at the beginning of such four-fiscal quarter
period) (such consolidated pro forma EBITDA, “Pro Forma EBITDA”) shall not be less than
$150,000,000 and (b) the Company’s ratio of Total Debt (to be defined) on the Closing Date to Pro
Forma EBITDA shall be no more than 4.25 to 1.0.



5. The Arrangers shall have received a certificate from the chief financial officer of the
Company certifying that the Company and its subsidiaries, on a consolidated basis after giving
effect to the Transactions and the other transactions contemplated hereby, are solvent.



6. All requisite governmental authorities and third parties shall have approved or consented
to the Transactions and the other transactions contemplated hereby to the extent required, all
applicable appeal periods shall have expired and there shall be no litigation, governmental,
administrative or judicial action, actual or threatened, that could reasonably be expected to
restrain, prevent or impose burdensome conditions on the Transactions or the other transactions
contemplated hereby.



7. The Arrangers shall be satisfied with the liquidity position of the Company and with the
terms of any ongoing indebtedness (including maturity, pricing, covenants, etc.) and, in
particular, the terms of the Company’s accounts receivable securitization program.



8. The Arrangers shall have received, at least five business days prior to the Closing Date,
all documentation and other information required by regulatory authorities under applicable “know
your customer” and anti-money laundering rules and regulations, including without limitation the
PATRIOT Act.



1 The Financing Parties acknowledge that the B1
Index Rating by Moody’s was withdrawn. Unless another Index Rating by
Moody’s is re-instituted prior to the Closing Date, the B1 rating shall
be deemed to apply until such time as an updated rating becomes available.



2 All capitalized terms used but not defined
herein have the meanings given to them in the Commitment Letter to which this
Exhibit B is attached, including Exhibit A thereto. Unless the context
requires otherwise, references herein to the Agents shall be deemed to be
references to each of the Agents as defined in such Exhibit A and the Agents as
defined in such Exhibit B.




5